Pontiac residents hit with $141 fee

Because of a shortfall in the sanitation fund and a shrinking tax base, Pontiac is issuing a $141.59 per household sanitation fee on winter tax bills, a city official said.

“This is really indicative of the fact that our taxable value has fallen so greatly in Pontiac, so we’re not bringing in enough from the sanitation millage to cover the $4.4 million in expenses,” said Finance Director John Naglick.

The city’s property tax base is expected to shrink another 13.5 percent in the coming year, according to the Oakland County Equalization Division.

Pontiac’s tax revenues have fallen by roughly half since 2008.

Residents pay 2.8183 mills on their summer taxes for sanitation services, Naglick said, bringing in about $1.5 million annually.

The city also receives a $780,000 annual host fee from its waste hauler for a transfer station at the closed Collier Road landfill.

The city’s sanitation fund has about $4.4 million in annual expenses, leaving a $2.2 million shortfall.

The amount that’s being collected to cover the shortfall — about $2.5 million —accounts for delinquent taxpayers. Pontiac’s tax collection rate stands at a “very low” 76 percent, Naglick said.

Last year, an $80 fee was assessed to cover a sanitation fund shortfall.

“We put it on 18,000 tax bills and we probably got 50 calls — not many,” Naglick said of the reaction to this year’s fee.

“If the city was wealthier, the general fund would be able to cover that, but because the general fund’s in such tough shape, the city doesn’t have the capacity to cover the shortfall. That’s why we had to enact the user fee.”

For the typical taxpayer, Pontiac’s sanitation millage and sanitation fee combined will equal about $200 a year, Naglick said.

In Waterford Township, where residents can choose their waste hauler, the average taxpayer pays about $260 annually for trash collection, Naglick said.

In Rochester Hills, which has a single waste hauler, similar to Pontiac, residents pay about $200 annually for trash collection, he said.

“We don’t think it’s out of line with what citizens in other communities are paying for trash service,” Naglick said.

The $1.4 million of the city’s yearly sanitation budget goes to environmental compliance costs associated with the closed landfill as well as the retiree health-care costs of workers who retired from the city’s sanitation department.

The department ceased to exist in 2004, when the city contracted with a private waste hauler, Onyx, which later became Veolia Environmental Services.

That waste hauler is now Advanced Disposal Services, which bought Veolia Environmental Services in November.

The city is in the process of amending the 20-year waste hauler contract signed in 2004, said Emergency Financial Manager Lou Schimmel.

“We had a meeting with the new owners, Advanced Disposal, and had a discussion with them about our contract, and we’re in the process of negotiating some adjustments to the contract to provide some sizable concessions to the city to lower our costs,” Schimmel said.

Those changes are expected to include the call center being operated by Advanced Disposal, rather than the city.

The move is being made to “lower our costs and provide better service, because residents will be able to deal directly with Advanced Disposal without having an intermediary, which slows down the process of responding to their concerns,” the emergency financial manager said.

Advanced Disposal has agreed to pick up waste containers in the downtown area and in the city’s parks, and waive the fee that was previously charged for those services, Schimmel said.

The waste hauler also is “going to provide a (recycling) program on a voluntary basis at a small cost for those residents who want it,” Schimmel said.

The emergency financial manager said he expects negotiations with Advanced Disposal to be complete within the next one to two months.